In what would be described in meteorological terms as a blizzardof proposals, California Gov. Gray Davis and his Democraticmajority state Assembly leaders Thursday announced multiple newlaws to push accelerated generation and conservation efforts thatare envisioned to unfold at a frenetic pace in the weeks and monthsahead.

As part of the actions, including a half dozen executive ordersand proclamations, the governor sent letters to President Bush andFERC Chairman Curt Hebert, seeking various federal actions thatwill help facilitate the state’s all-out generation andconservation efforts aimed at heading off rolling blackouts thissummer.

Key to the varied proposals is a massive relaxation ofpermitting requirements by various state and federal agencies.

In a wide assortment of moves, including putting a SouthernCalifornia Edison Co. power plant operations executive in charge asthe state’s “energy construction czar,” Gov. Davis committed thestate to: (a) streamlining the siting of new temporary peakinggeneration plants through the state water resources department; (b)accelerating baseload plant construction through bonuses andcutting red tape; (c) maximizing the output of existing plants; (d)providing economic incentives through rebates and tax breaks torenewable energy and distributed generation plants.

Citing his Jan. 17 declaration of an energy emergency in thestate, Davis asked President Bush to have the federal permittingprocess streamlined for the siting and operation of power plants inthe state. Davis also wrote FERC’s Hebert to ask for a furtherextension of an existing waiver regarding FERC-mandated operatingand efficiency standards for qualifying facility (QF) cogenerationplants. The governor asked for the waiver now in effect throughApril 30 to be extended through Oct. 15.

Only a few hours earlier, Democratic state legislative leader ofthe Assembly Robert Hertzberg unveiled a package of nine proposedpieces of state legislation — four designed to increase supply byup to 7,600 MW over the next four years, and the rest aimed atincreased conservation programs that would eventually save theequivalent of 1,200 MW, including 500 MW by this summer.

Hertzberg and a coalition of colleagues in the legislaturepreviewed proposals as offering consumer protection in the shortterm, and “long-term solutions to provide reliable power.” Theproposed new laws include:

Conservation measures would provide more incentives forresidences, schools and government facilities to replaceinefficient appliances and equipment, and spend $100 million toestablish a statewide brigade of community nonprofit agencies todistribute low-energy light bulbs to residences.

Complementing the legislative proposals, Davis talked about a21-day permitting process for emergency peaking facilities;providing “acceleration” bonuses for developers that can bring newgeneration plants on line by this July; and establishing a stateemissions offset bank that would allow existing plants to operatemore hours this summer without the usual permitting red tape —presumably from either state or federal agencies. He also proposedthe state spending at least $120 million to boost renewable energyand distributed generation projects, in addition to a 50% taxcredit for homes and businesses that install renewable energysystems.

On the regulatory front yesterday, California’s Public UtilitiesCommission deferred action on Pacific Gas & Electric Co.’srequest for emergency gas supplies from its neighboring gas utilityand a long-standing request from Southern California Edison Co. tore-establish the formula for setting monthly prices for suppliesfrom QF plants, which collectively account for about 30% of theprivate sector utilities’ supplies and half of PG&E andEdison’s current under-collections. Both items were delayed until aspecial CPUC meeting Feb. 15.

CPUC President Loretta Lynch said she decided to postpone actionon the emergency gas supply request to consider “marketdevelopments in the PG&E utility’s natural gas supply efforts,”which earlier this week turned up six suppliers willing to extentcontracts under the new CPUC-authorized securitization deals.PG&E picked up three more gas suppliers yesterday willing toextend gas deals based on the new securitization provisions. Thethree new contacts are with TXU Canada, TXU Houston and Williams,but as with the first six deals, the utility will not disclosevolumes or terms. A PG&E gas utility spokesperson did say thatthe latest suppliers agreed to provide extra supplies next weekwhen a developing cold snap in the state is expected to continue.

At the state-chartered transmission grid operator (Cal-ISO),Stage Three power alerts continued Thursday and into today (25consecutive days), but the threat of rolling blackouts, so far, hasbeen avoided. However, a Cal-ISO spokesperson said his organizationwas still awaiting the potential adverse impact of the lifting of aSan Francisco federal court’s temporary restraining order againstgenerators cutting back on supplies to California.

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